Currently conducting beta-testing, Microsoft plans to release an
e-commerce framework to customers and developers later this year
that analysts say will help make it much easier for entrepreneurs
to conduct business-to-business e-commerce with their trading
partners and suppliers.

The framework is expected to have a major impact on the way
companies communicate with each other because it helps automate the
transmission of documents commonly used in business. While
electronic data interchange (EDI) has been around for years, it
hasn't been widely embraced by many smaller companies because
of its considerable expense. Microsoft plans to change all that by
making its new automated system affordable to a wider range of
companies, both large and small.

Melissa Campanelli is a technology writer in Brooklyn, New
York, who has covered technology for Mobile Computing &
Communications and Sales & Marketing Management
magazines. You can reach her at mcampanelli@earthlink.net.

Setting The Standard

Microsoft's framework, called BizTalk, is based on
Extensible Markup Language (XML) standards--a document format
created for the Web that's more flexible than HTML--which is
intended to simplify the receipt and processing of electronic
documents. Microsoft is betting XML will become the trade standard
for all types of Internet commerce. If the standard is embraced by
the user and server communities, the Internet will allow companies
in all kinds of industries to communicate electronically,
regardless of their computer systems' compatibility. Other
heavy hitters in the computer industry, including IBM, Netscape
Communications and Sun Microsystems, are also jumping on the XML
bandwagon.

If XML becomes the standard--and usually Microsoft gets its way
in setting standards--a small business using BizTalk-enabled
products, including Microsoft's Internet Commerce Server, would
be able to generate a purchase order on its computer system and
have it appear immediately in a supplier's computer system via
a real-time Internet connection. To avoid the prohibitive cost of
setting up an EDI system, small companies today usually forego this
luxury; instead, they generate purchase orders, print them out and
fax them to suppliers. The order may sit untouched for half a day
before it's processed, which then requires suppliers to re-key
the information into a computer.

Some small companies are forced to speed up these procedures by
purchasing EDI-enabling software because their larger suppliers
insist on it. To get around establishing a full system, they use
cheaper translation software that converts a standard EDI document
into a form that's acceptable to the other company's
back-end system.

One company working this way is Coastal Tool and Supply, a
retailer in Hartford, Connecticut, that sells about 5,000 types of
hand and power tools. The 18-year-old company, which launched a Web
site in 1995, generally communicates with its 400 suppliers by
faxing and phoning in purchase orders, invoices and stock status
reports, but it employs EDI in some instances.

For its EDI processes, the company uses translation software
called Qualedi from Eventra Software (http://www.eventra.com) and a
dial-up connection. This allows Coastal to piggyback on its
manufacturers' expensive EDI systems. While this is somewhat
efficient, it's not based on any Internet standard, so the
information is not transmitted in real time. As a result, Coastal
has no idea when its supplier is going to dial up and read its
mail.

"I have to check constantly to see if [a supplier has]
received my purchase order or my invoice, and then send a
response," says Todd Mogren, MIS manager at Coastal. "We
really don't want to have to check our EDI box more than once a
day."

BizTalk and its XML-based Internet backbone is expected to
eliminate those hassles because the information will be handled
completely electronically. "[With BizTalk,] we'll be able
to send purchase orders, and the responses will be in real
time," says Mogren. "This is important because we'll
be able to know immediately if and when they got the P.O.,
what's shipping and what's not, and when products are going
to be shipped."

"Right now, we're doing everything the old-fashioned
way," says Rob Ludgin, Coastal's owner and founder.
"What we're looking for is to work our way into the
easiest and possibly the least expensive way to do our
ordering."

EDI For The Rest Of Us

By using XML as the format for BizTalk, Microsoft may indeed
make EDI possible for all businesses. "BizTalk is about
Microsoft bringing together customers, standards bodies and
software writers to define the right standards and schemas for
XML-based data and process integration," says Rebekkah Kumar,
a product manager at Microsoft. "What this means for small
businesses is that there will be a standard way to define how to
communicate that the industry will rally around, and the ability
for them to play will be that much easier."

While Microsoft could not confirm at press time how much it
would cost to implement BizTalk, analysts say a BizTalk-enabled
Internet Commerce Server from Microsoft should cost entrepreneurs
about $10,000, plus the cost of integration services offered by a
local Microsoft Certified Solutions Provider. A list of these
certified providers can be found on Microsoft's Web site
(http://www.microsoft.com/industry).
A comparable EDI system costs about $15,000.

In addition, Microsoft hopes manufacturers of other operating
systems, such as UNIX and Macintosh, will create tools that will be
BizTalk-enabled as well. Other BizTalk-enabled products from
Microsoft are expected out later this year.

"Microsoft is basically pushing XML into applications that
are inexpensive enough for small businesses to own or
operate," says Scott Smith, president of Tera Group LLC, an
electronic-business consulting firm in McLean, Virginia. "If
you're a small-business owner, ultimately you want all your
trading partners to implement it. The more of your trading partners
that have XML, the more valuable the investment is to you." In
the future, EDI systems should be able to work with XML, but
it's too soon to determine when that will be.

Microsoft's BizTalk vision currently includes partnerships
with large XML vendors, which will allow smaller companies to
communicate with these suppliers' larger systems in real time.
For example, webMethods, a Fairfax, Virginia, manufacturer of large
XML-based integration servers for major companies, announced a
partnership with Microsoft and BizTalk; this will allow businesses
that use BizTalk to easily communicate with webMethods'
servers.

"A good example of this is Dun and Bradstreet," says
Phillip Merrick, president and CEO of webMethods Inc. "Now
small companies using BizTalk can get access to D&B's
credit information in real time, even if they're running on
webMethods' system."

Coastal's Mogren says if XML-based integration becomes
widespread, the possibilities for enhancing business communications
are numerous. He foresees a situation where if Coastal doesn't
offer a product a customer requests, the request could be passed
through Coastal's server to query the manufacturer's
XML-enabled Web site. All these transactions, including getting
word back to the customer about the product, could take just a few
seconds.

"If the customer wants to proceed [with the purchase], then
the Web site can create the correct document, transmit it in real
time to the manufacturer, and get a response back about when it
will ship," says Mogren. "The possibilities are
endless."

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Next Step

Visit XML Exchange (http://www.xmlx.com), a public forum open
to anyone to ask questions and discuss their challenges and
successes in making XML work. The site is sponsored by CommerceNet
(http://www.commerce.net), a
leading industry association for Internet commerce whose membership
includes more than 500 companies and organizations worldwide.